Steve

Shannon

PANEL 3 – BIG DATA

THE MARKETING VALUE CHAIN

PROVING THE CONTRIBUTION OF MARKETING TO THE

BUSINESS

Stephen Diorio

MASB Fellow

CONFIDENTIAL 2

A 10% increase

in the value of

the brand will

drive a 3.3%

increase in

stock price2

Source: 1) Brand Value as a Percentage of Marketing Capitalization. Applying the Brand Investment and Valuation Model. Analysis of Meier, Findley, Stewart. Marketing Accountability Standards

Board. 2017 2) Marketing's Impact on Firm Value: Generalizations from a Meta Analysis, AMA, Alexander Edeling and Marc Fischer, Journal of Marketing Research 2016, 3) Empirical

Generalizations About Marketing Impact, Hanssens, Marketing Science Institute 4) the Marketing Accountability Standards Board CIR Initiative, 2018.

A 10% increase

in the value of

customer assets

will drive a 7.2%

increase in

stock price2

A 10% increase

in in

organizational

competence will

drive a 5.5%

increase in

stock price2

Enterprise

initiatives aimed

at improving the

Return on

Marketing

Investment

(ROMI) Initiatives

are generating

improvements of

up to 9 percent2,4

A10% increase in

the effectiveness

of digital

channels will

drive a 2.2%

increase in stock

price3

A 10% increase in

perceptions of

product quality

will drive a 3%

increase in stock

price2,3

QUALITY OF PEOPLE

& PRODUCTS

BRAND

VALUE

CUSTOMER

EQUITY

ORGANIZATIONAL

COMPETENCE

DIGITAL

PLATFORMS

MARKETING

EFFECTIVENESS

THE FINANCIAL CONTRIBUTION OF MARKETING TO THE ENTERPRISE

CHALLENGE: BUILD FINANCIALLY CREDIBLE MEASURES OF MARKETING’S

VALUE

CONFIDENTIAL

GOAL: MARKET THE FINANCIAL CONTRIBUTION OF MARKETING TO MANAGEMENT AND THE BOARD

BRAND

ASSETS

BRAND

PREFERENCE

ORGANIZATIONAL

MEASUREMENT

CAPABILITIES

ORGANIZATIONAL

KNOWLEDGE

SHARING

MARKETING

EFFECTIVENESS

SALES AND SERVICE

EFFECTIVENESS

OWNED DIGITAL

MEDIA

PERFORMANCE

INTER -

DEPARTMENTAL

CONNECTEDNESS

DIGITAL CHANNEL

PERFORMANCE

DIGITAL

EXPERIENCE

CUSTOMER

LOYALTY

PRODUCT &

SERVICE

QUALITY

PERCEPTIONS OF

INNOVATION

EMPLOYEE TALENT,

LEADERSHIP AND

ENGAGEMENT

CUSTOMER

SATISFACTION

CHANNEL REACH,

SHARE AND

PERFORMANCE

CUSTOMER

RELATIONSHPS

BRAND

MOMENTUM

18 STRATEGIC VALUE DRIVERS OF ENTERPRISE VALUE

QUALITY OF PEOPLE

& PRODUCTS

BRAND

VALUE

CUSTOMER

EQUITY

ORGANIZATIONAL

COMPETENCE

DIGITAL

PLATFORMS

MARKETING

EFFECTIVENESS

THE FINANCIAL CONTRIBUTION OF MARKETING TO THE ENTERPRISE

CONFIDENTIAL

THE MASB MARKETING VALUE CHAINSM

1

PAID, OWNED AND

EARNED MEDIA

OWNED MARKETING

INFRASTRUCTURE

PROMOTION ACTIONS

PLACE-DISTRIBUTION

ACTIONS

PRODUCT ACTIONS

PRICING ACTIONS

CAPABILITY

DEVELOPMENT

COMPETITIVE, BRAND, &

ACQUISITION STRATEGY

2

BRAND VALUE

CUSTOMER

RELATIONSHIP EQUITY

ORGANIZATIONAL

COMPETENCE

SALES AND MARKETING

EFFECTIVENESS (ROMI)

DIGITAL PLATFORM

EFFECTIVENESS

QUALITY OF PRODUCTS

AND PEOPLE

3

PURCHASE DECISIONS

USAGE AND BUYING

CYCLES

CONSUMPTION

FREQUENCY

PURCHASE SIZE AND

VOLUME

SHARE OF

TRANSACTIONS

RESPONSE AND

CONVERSION RATES

REFERRALS AND WOM

LOYALTY

PRICE SENSITIVITY

4

VOLUME

SHARE

LIFT

VOLATILITY

VELOCITY

PROFIT MARGINS

CUSTOMER ECONOMICS

COSTS

FUTURE OPTION VALUE

5

ENTERPRISE VALUE

REVENUE

PROFITS

CASH FLOW

GROWTH RATE

BRAND ASSET VALUE

COST OF SALES

COST OF CAPITAL

ACTIONS AND

INVESTMENTS

KEY DRIVERS

OF VALUE

CUSTOMER

BEHAVIOR

BUSINESS

OUTCOMES

FIRM

FINANCIAL

PERFORMANCE

A FRAMEWORK FOR CONNECTING MARKETING INVESTMENTS AND ACTIONS TO FIRM FINANCIAL PERFORMANCE AND ENTERPRISE VALUE

UNDERSTAND

AND AGREE

DOCUMENT

DRIVERS AND

HYPOTHESES

TEST AND

MEASURE

MODEL, VALUE

AND PREDICT

A ROADMAP FOR CONTINUOUS IMPROVEMENT IN RETURN

CONFIDENCE AND CERTAINTY

COST AND COMPLEXITY OF ANALYSIS

DECIDE

AND ACT

CONFIDENTIAL

PAID, OWNED AND

EARNED MEDIA

OWNED MARKETING

INFRASTRUCTURE

PROMOTION ACTIONS

PLACE-DISTRIBUTION

ACTIONS

PRODUCT ACTIONS

PRICING ACTIONS

CAPABILITY

DEVELOPMENT

COMPETITIVE, BRAND, &

ACQUISITION STRATEGY

BRAND VALUE

CUSTOMER

RELATIONSHIP EQUITY

ORGANIZATIONAL

COMPETENCE

SALES AND MARKETING

EFFECTIVENESS (ROMI)

DIGITAL PLATFORM

EFFECTIVENESS

QUALITY OF PRODUCTS

AND PEOPLE

PURCHASE DECISIONS

USAGE AND BUYING

CYCLES

CONSUMPTION

FREQUENCY

PURCHASE SIZE AND

VOLUME

SHARE OF TRANSACTIONS

RESPONSE AND

CONVERSION RATES

REFERRALS AND WOM

LOYALTY

PRICE SENSITIVITY

VOLUME

SHARE

LIFT

VOLATILITY

VELOCITY

PROFIT MARGINS

CUSTOMER ECONOMICS

COSTS

FUTURE OPTION VALUE

ENTERPRISE VALUE

REVENUE

PROFITS

CASH FLOW

GROWTH RATE

BRAND ASSET VALUE

COST OF SALES

COST OF CAPITAL

Miller Coors; BRAND A

THE MASB MARKETING VALUE CHAINSM

1 2 3 45

ACTIONS AND

INVESTMENTS

KEY DRIVERS

OF VALUE

CUSTOMER

BEHAVIOR

BUSINESS

OUTCOMES

FIRM

FINANCIAL

PERFORMANCE

MILLER COORS EXAMPLE

©2019 MASB 7

Steve Shannon

©2019 MASB 8

About Steve Shannon

◼ Former CMO of Hyundai Motor America and 32-year

veteran of the auto industry including Cadillac, Buick,

Saab, and Saturn brands

◼ Led multiple Super Bowl, Oscar, Grammy and NCAA

Football programs, and an award-winning integration

with The Walking Dead

◼ Currently advisor to:

◼ Yext digital knowledge management platform

◼ Foursquare location data platform

◼ EDO data science solution for optimizing linear TV through

measuring search engagement

◼ Harvard Undergraduate and Columbia MBA

CONFIDENTIAL

PAID, OWNED AND

EARNED MEDIA

OWNED MARKETING

INFRASTRUCTURE

PROMOTION ACTIONS

PLACE-DISTRIBUTION

ACTIONS

PRODUCT ACTIONS

PRICING ACTIONS

CAPABILITY

DEVELOPMENT

COMPETITIVE, BRAND, &

ACQUISITION STRATEGY

BRAND VALUE

CUSTOMER

RELATIONSHIP EQUITY

ORGANIZATIONAL

COMPETENCE

SALES AND MARKETING

EFFECTIVENESS (ROMI)

DIGITAL PLATFORM

EFFECTIVENESS

QUALITY OF PRODUCTS

AND PEOPLE

PURCHASE DECISIONS

USAGE AND BUYING

CYCLES

CONSUMPTION

FREQUENCY

PURCHASE SIZE AND

VOLUME

SHARE OF TRANSACTIONS

RESPONSE AND

CONVERSION RATES

REFERRALS AND WOM

LOYALTY

PRICE SENSITIVITY

VOLUME

SHARE

LIFT

VOLATILITY

VELOCITY

PROFIT MARGINS

CUSTOMER ECONOMICS

COSTS

FUTURE OPTION VALUE

ENTERPRISE VALUE

REVENUE

PROFITS

CASH FLOW

GROWTH RATE

BRAND ASSET VALUE

COST OF SALES

COST OF CAPITAL

Miller Coors; BRAND A

THE MASB MARKETING VALUE CHAINSM

1 2 3 45

ACTIONS AND

INVESTMENTS

KEY DRIVERS

OF VALUE

CUSTOMER

BEHAVIOR

BUSINESS

OUTCOMES

FIRM

FINANCIAL

PERFORMANCE

HYUNDAI EXAMPLE

CONFIDENTIAL

Hyundai US Sales

0

50

100

150

200

250

300

350

400

450

500

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 3004 2005 2006 2007 2008

Year

000's

Cars

HYUNDAI US SALES

CONFIDENTIAL

Hyundai Brand Value Over Time

0

1

2

3

4

5

6

2005 2006 2007 2008 2009

Year

US

$ B

Hyundai

HYUNDAI BRAND VALUE OVER TIME

FUTURE OPTION VALUE OF BRAND EXTENSION – SHARE GAINS

FUTURE OPTION VALUE OF BRAND EXTENSION – MARGIN IMPROVMENT